News, Trends, Uncategorized

Foreclosure vs. Short Sale

It’s sad to see so many folks so discouraged about the looming possibility of losing their home, they ignore the less destructive option of a short sale and instead go to foreclosure (which takes many years to recover from).  In desperation, many people try selling their home themselves to save on realtor’s commissions, pricing it just above what they owe, only to end up in foreclosure anyway. 

You should know, and share with anyone who needs to know, that a home owner can avoid a foreclosure if they act quickly.  At the Bernardi Real Estate Group, we’ve helped many home owners this year avoid foreclosure by negotiating a short sale for them.  Some people just don’t understand the detrimental effects of foreclosures, or are afraid of considering a short sale beacuse they think it will cost them more money.  We’d like to dispell some of the myths, and clarify how we can help.  Here are some facts that show the benefits of a short sale compared to a foreclosure:

                                  Foreclosures:                                Short Sales:

 Credit Scores   Drops in FICO and other credit scores from 200 to 400 points.  

Short sales generally do not effect credit scores, late payments or default in payments can effect credit by 50 to 150 points.

 Credit Reports:   Foreclosure will remain a derogatory mark on credit reports for 7 to 10 years  

A short sale is not a derogatory mark on credit report, the credit bureaus mark it as a paid note.

  Buying again:    Most cases must wait at least 7 years before buying again, if the home was a primary residence it may be shortened to 5 years.  

If there have been no late payments, some can buy again immediately.

If there have been late payments, two years is required to apply for a Fannie-Mae backed mortgage, or 3 years for an FHA loan.


Ethics & The Economy:


  Foreclosed homes can ruin a neighborhood, causing even further declines in the market values surrounding the home. Some people strip the home of valuables and leave the home abandoned.  

Short sales help the economy because the banks have less debt, the homes are kept by individual owners who take care of them, and the bank will pay the realtor’s commission who helped sell the home. 

Call us today if you or anyone you know needs help selling or buying real estate in the Boulder or Broomfield area:  303-402-6000 

 or email us at

For more information about short sales vs. foreclosures visit:

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